Common use of Election Clause in Contracts

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section ---------------------- 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands hereby acknowledges that Section 83 he or she has ---------------------- been informed that, with respect to the exercise of an Option for unvested Shares, an election may be filed by the Purchaser with the Internal Revenue Service, within 30 days of the purchase of the Shares, electing pursuant to -------------- Section 83(b) of the Code of 1986, as amended (the "Code"), taxes as ordinary income the to be taxed currently on any difference between the amount paid for purchase price of the Shares and their Fair Market Value on the date of purchase. In the case of a Nonstatutory Stock and Option, this will result in a recognition of taxable income to the Purchaser on the date of exercise, measured by the excess, if any, of the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this contextShares, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Option is exercised over the purchase price for the Shares. Absent such an election, taxable income will be measured and recognized by Purchaser at the time or times on which the Company's Repurchase Option lapses. In the case of an Incentive Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing Option, such an election will result in a recognition of income to the Purchaser for alternative minimum tax purposes on the date of exercise, measured by the excess, if any, of the fair market value of the Shares, at the time the option is exercised, over the purchase price for the Shares. Absent such an election, alternative minimum taxable income will be measured and recognized by Purchaser at the time or times on which the Company's Repurchase Option lapses. Xxxxxxxxx is strongly encouraged to seek the advice of his or her own tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election under Section 83(b) of the Code with the I.R.S. Even if the fair market value Code. A form of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election Election under Section 83(b) is attached heretohereto as Exhibit C-5 for reference. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE ----------- PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES REPRESENTATIVE TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands hereby acknowledges that he or she has been informed that, with respect to the exercise of an Option for Unvested Shares, an election (the "Election") may be filed by the Purchaser with the Internal Revenue Service, within 30 days of the purchase of the exercised Shares, electing pursuant to Section 83 ---------------------- 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the and Regulations thereunder to be taxed currently on any difference between the amount paid for the Stock and the fair market value purchase price of the Stock as of exercised Shares and their Fair Market Value on the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Optionpurchase. In the event case of a Nonstatutory Stock Option, this will result in a recognition of taxable income to the Company has registered under Purchaser on the Exchange Actdate of exercise, "restriction" with respect to officersmeasured by the excess, directors and 10% shareholders also means the 6-month period after the Closing during which such officersif any, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed Fair Market Value of the exercised Shares, at the time the Option is exercised over the purchase price for the exercised Shares. Absent such an Election, taxable income will be measured and recognized by Purchaser at the time or times on which the Company's Repurchase Option lapses. In the case of an Incentive Stock Option, such an Election will result in a recognition of income to the Purchaser for alternative minimum tax purposes on the date of exercise, measured by the excess, if any, of the Fair Market Value of the exercised Shares, at the time the option is purchased rather than when exercised, over the purchase price for the exercised Shares. Absent such an Election, alternative minimum taxable income will be measured and as recognized by Purchaser at the Purchase time or times on which the Company's Repurchase Option lapses. Purchaser is strongly encouraged to seek the advice of his or 6-month Section 16(b) period expires by her own tax consultants in connection with the purchase of the Shares and the advisability of filing an election of the Election under Section 83(b) of the Code with the I.R.S. Even if the fair market value Code. A form of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election Election under Section 83(b) is attached heretohereto as Exhibit C-4 for reference. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b)) OF THE CODE, EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES REPRESENTATIVE TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(BThe Company agrees that should Purchaser elect to file the election under Section 83(b) ELECTION IS A CONDITION TO THE SALEof the Internal Revenue Code that the Company will timely file at the proper Internal Revenue Service Center all corresponding filings provided by Section 83(b) of the Internal Revenue Code and Regulations thereunder in order to make the Purchaser's election effective. In the event the Company fails to do so, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERthe Company will reimburse Purchaser the additional income taxes, including any additional tax on the reimbursement, incurred by the Purchaser as a result of the Company's failure to comply with the requirements of Section 83(b) of the Code and Regulations thereunder.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered its securities under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6six-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that if such provision is applicable to him he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6six-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. within thirty (30) days from the date of purchase. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-six month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANYCORPORATION'S TO FILE TIMELY THE ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(b)) AND UNDER ANY CORRESPONDING PROVISIONS OF STATE TAX LAW, EVEN IF THE PURCHASER REQUESTS THE COMPANY CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that he (and not the Company) shall be responsible for his own federal, state, local or foreign tax liability and any of his other tax consequences that may arise as a result of the transactions contemplated by this Agreement. Purchaser shall rely solely on the determinations of his tax advisors or his own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "“restriction" means ” includes the right of the Company to buy back the stock Stock pursuant to the Purchase Optionits repurchase option. In the event the Company has registered any of its shares under the Securities Exchange ActAct of 1934, "“restriction" ” with respect to officers, directors and ten percent (10% shareholders %) stockholders also means the 6-month period after the Closing purchase of the Stock during which such officersofficer, directors director and ten percent (10% shareholders are %) stockholders could be subject to suit under Section 16(b) of the Securities Exchange ActAct of 1934. The Purchaser understands that he Purchaser may elect to be taxed at the time the shares of Stock is are purchased rather than when and as the Purchase Option Company’s repurchase option or 6-month Section 16(b) period expires restrictions expire by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(bInternal Revenue Service within thirty (30) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of from the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S ’S SOLE RESPONSIBILITY AND NOT THE COMPANY'S ’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b)) OF THE CODE, EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S ’S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that If requested by Purchaser, the Company and Seller agree to make an election pursuant to Section 83 ---------------------- 338(h)(10) of the Internal Revenue Code of 1986Code, as amended (the "Code"and any corresponding provisions of Arizona and other applicable state tax law), taxes as ordinary income with respect to the difference between the amount paid for the Stock and the fair market value purchase of the Stock as of Stock, which election shall allocate the date any restrictions on Purchase Price to the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock Company’s assets pursuant to the method prescribed in Treasury Regulation §1.338-6 (as reasonably determined by Purchaser and agreed upon by Seller). Purchaser shall promptly pay to Seller upon receipt of demand therefor (which demand shall be accompanied by copies of the documentation and computations described in the immediately following sentence) as additional Purchase Option. In Price an amount equal to the event the Company has registered under the Exchange Actincreased Taxes, "restriction" if any, incurred by Seller with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Closing occurs and the year in which any payments are made pursuant to this provision (including any additional Taxes in respect of such amounts) as a result of any Section 338(h)(10) Election or analogous elections made such that Seller will receive the same after-Tax proceeds with respect to the year in which the Closing occurs and the year in which any payments are made pursuant to this provision as if Seller had sold stock and no Section 338(h)(10) Election or analogous elections had been made. Such determinations shall be based upon documentation and computations made by Seller with respect to amounts due hereunder presented to Purchaser. Seller shall provide such documentation and computations to Purchaser makes no later than 90 calendar days after (i) the electionClosing Date and (ii) the date of any payment of additional Purchase Price giving rise to the obligation to pay additional amounts hereunder; provided, however, that Seller’s failure to provide such documentation and computations within such time shall not constitute a waiver of its rights to additional amounts hereunder. Purchaser must also file Any item of income, expense, gain, or loss (other than any amount in respect of allocations of Purchase Price in connection with a copy of Section 338(h)(10) Election or additional amounts payable hereunder) occurring after the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERClosing Date shall not be considered in calculating increased Taxes.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section ---------------------- 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section 83 83(a) of ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income for a [Nonstatutory] [Incentive] Stock Option the difference between the amount paid for the Stock Shares and the fair market value Fair Market Value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restriction" means the right of the Company to buy back the stock Shares ----------- pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Repurchase Option set forth in Section 16(b4(a) of the Exchange Actthis Agreement. The Purchaser understands that he Purchaser may elect to be taxed at the time the Stock is purchased Shares are purchased, rather than when and as the Purchase Repurchase Option or 6-month Section 16(b) period expires expires, by filing an election under Section 83(b) (an "83(b) Election") of the Code with -------------- the I.R.S. Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value Fair Market Value of the Stock Shares at the time of the execution of this Agreement equals the amount paid for the StockShares, the election must be made to avoid adverse income tax consequences treatment under Section 83(a) in the future. The form for making Purchaser acknowledge that it is Purchaser's sole responsibility and not the Company's to timely file the 83(b) Election, even if Purchaser requests the Company or its representative to make this election is attached heretofiling on Purchaser's behalf. The Purchaser understands that failure to make this filing file such an election in a timely will manner may result in the recognition of ordinary income by the adverse tax consequences for Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser further understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed an additional copy of such election form should be filed with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's his or her federal income tax return for the tax calendar year in which the Purchaser makes the electiondate of this Agreement falls. Purchaser must also file acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser's death. Purchaser agrees that he or she will execute and deliver to the Company with this executed Agreement a copy of the election form Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the "Acknowledgment") attached -------------- hereto as Attachment C. Purchaser further agrees that he or she will execute ------------ and submit with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION Acknowledgment a copy of the 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERElection attached hereto as Attachment D (for tax purposes in connection with the early exercise of an ------------ option) if Purchaser has indicated in the Acknowledgment his or her decision to make such an election.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock Shares and the fair market value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restriction" means the right of the Company to buy back the stock shares pursuant to the Purchase Repurchase Option. In the event the Company has registered under the Securities Exchange Act of 1934 (the "Exchange Act"), "restriction" with respect to officers, directors directors, and 10% shareholders also means the 6six-month period after the Closing purchase of the Shares during which sales of certain securities by such officers, directors directors, and 10% shareholders are subject would give rise to suit liability under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is Shares are purchased rather than when and as the Purchase Repurchase Option or 6six-month Section 16(b) period expires expires, by filing an election under Section 83(b) of the Code with the I.R.S. Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value of the Stock Shares equals the amount paid for the StockShares, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing in a timely manner will result in the recognition of ordinary income by the Purchaser, as the Purchase Repurchase Option lapses, or after the lapse of the 6six-month Section 16(b) period, on the any difference between the purchase price and the fair market value of the Stock Shares at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE TIMELY THE ELECTION UNDER SECTION 83(b83(B), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2. The Purchaser understands that taxpayer who performed the services is: Name: Address: Taxpayer Ident. No.: The property with respect to which the election is being made is _____________ shares of the common stock of ARTISTdirect, Inc. The property was issued on ______________, _____. The taxable year in which the election is being made is the calendar year _____. The property is subject to a repurchase right pursuant to which the issuer has the right to acquire the property at the original purchase price if for any reason taxpayer's service with the issuer terminates. The issuer's repurchase right will lapse in a series of annual and monthly installments over a four (4)-year period ending on ___________, 200__. The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is $__________per share. The amount paid for such property is $___________ per share. A copy of this statement was furnished to ARTISTdirect, Inc. for whom taxpayer rendered the services underlying the transfer of property. This statement is executed on _________________, ______. ______________________________ ______________________________ Spouse (if any) Taxpayer This election must be filed with the Internal Revenue Service Center with which taxpayer files his or her federal income tax returns and must be made within thirty (30) days after the execution date of the Stock Purchase Agreement. This filing should be made by registered or certified mail, return receipt requested. Optionee must retain two (2) copies of the completed form for filing with his or her federal and state tax returns for the current tax year and an additional copy for his or her records. The property described in the above Section 83 ---------------------- 83(b) election is comprised of shares of common stock acquired pursuant to the exercise of an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, taxes as ordinary it is the intent of the Taxpayer to utilize this election to achieve the following tax results: One purpose of this election is to have the alternative minimum taxable income attributable to the difference between purchased shares measured by the amount by which the fair market value of such shares at the time of their transfer to the Taxpayer exceeds the purchase price paid for the Stock and shares. In the absence of this election, such alternative minimum taxable income would be measured by the spread between the fair market value of the Stock as of purchased shares and the date any restrictions purchase price which exists on the Stock lapsevarious lapse dates in effect for the forfeiture restrictions applicable to such shares. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b421(a)(1) of the Code with the I.R.S. Even if expressly excludes from income any excess of the fair market value of the Stock equals purchased shares over the amount paid for the Stocksuch shares. Accordingly, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure also intended to make this filing timely will result be effective in the recognition event there is a "disqualifying disposition" of ordinary the shares, within the meaning of Section 421(b) of the Code, which would otherwise render the provisions of Section 83(a) of the Code applicable at that time. Consequently, the Taxpayer hereby elects to have the amount of disqualifying disposition income measured by the Purchaser, as the Purchase Option lapses, or after the lapse excess of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of purchased shares on the date of purchasetransfer to the Taxpayer over the amount paid for such shares. FurthermoreSince Section 421(a) presently applies to the shares which are the subject of this Section 83(b) election, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with no taxable income is actually recognized for regular tax purposes at this time, and no income taxes are payable, by the Purchaser's tax return for the tax year in which the Purchaser makes the Taxpayer as a result of this election. Purchaser must also file a copy of The foregoing election is to be effective to the election form with full extent permitted under the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERCode.

Election. The Purchaser understands that Section 83 ---------------------- Proposing Stockholders shall deliver written notice to the Company and the Non-Proposing Stockholders setting forth in reasonable detail the terms of the Internal Revenue Code proposed Sale of 1986, as amended the Company (the "CodeSALE NOTICE"). Within 20 days following receipt of the Sale Notice (the "ELECTION PERIOD"), taxes as ordinary income the difference between Non-Proposing Stockholders shall deliver to the amount paid for the Stock Company and the fair market value Proposing Stockholders written notice setting forth such holders' election (i) to consent to and raise no objections against proposed Sale of the Stock as of Company, and if the date any restrictions on the Stock lapse. In this context, "restriction" means the right Sale of the Company is structured as a sale of stock, to buy back sell their Stockholder Shares on the stock pursuant terms and conditions set forth in the Sale Notice, or (ii) if such Non-Proposing Stockholders hold more than 20% of the Stockholder Shares, to deliver a written offer (a "STOCKHOLDER OFFER"), upon substantially the same terms as described in the Sale Notice, to acquire the Company (a "STOCKHOLDER TRANSACTION"). If the Non-Proposing Stockholders have not delivered a Stockholder Offer within such 20-day period, the Proposing Stockholders shall have 180 days after the expiration of the Election Period to consummate the Sale of the Company, or during which the Company may enter into an agreement providing for such a sale, on the terms specified in the Sale Notice. If the Sale of the Company is not consummated or the Company fails to enter into such an agreement within such 180-day period, the Proposing Stockholders shall again comply with the provisions of this Section 6. If the Non-Proposing Stockholders have delivered a Stockholder Offer within the Election Period, the Non-Proposing Stockholders must (A) obtain an executed definitive and binding agreement to consummate the Stockholder Transaction and obtain binding commitments regarding the financing thereof satisfactory in all respects to the Purchase OptionProposing Stockholders both within 30 days after receipt by the Proposing Stockholders of the Stockholder Offer and (B) must consummate the Stockholder Transaction within 120 days after receipt by the Proposing Stockholders of the Stockholder Offer. In If any of the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(bconditions set forth in (A) or (B) of the Exchange Actpreceding sentence is not fulfilled, the Other Stockholders must again comply with the provisions of this Section 6. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) consummation of a Sale of the Code Company or a Stockholder Transaction pursuant to this Section 6(b) shall be in accordance with the I.R.S. Even if the fair market value provisions of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERTexas Business Corporation Act.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the futurefixture. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser Grantee understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, may tax as amended (the "Code"), taxes as ordinary compensation income equal to the difference between the amount paid for the Stock shares of Restricted Stock, if any, and the fair market value of the shares of Restricted Stock as of the date any restrictions on the shares of Restricted Stock lapselapse in the absence of an election under Section 83(b) of the Code. In this context, "“restriction" ” means the right forfeitability of the Company to buy back the stock shares of Restricted Stock pursuant to the Purchase Optionterms of this Agreement. In To the event extent that the Company has registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), "the term “restriction" ,” with respect to officers, directors directors, and 10% shareholders shareholders, may also means mean the 6six-month period after the Closing acquisition of the shares of Restricted Stock during which sales of certain securities by such officers, directors directors, and ten percent (10% %) shareholders are subject would give rise to suit liability under Section 16(b) of the Exchange Act. The Purchaser Grantee understands that he or she may elect to be taxed at the time he or she receives the shares of Restricted Stock is purchased and while the shares of Restricted Stock are subjected to restrictions rather than waiting to be taxed on the shares of Restricted Stock when and as the Purchase Option restrictions lapse. The Grantee realizes that he or 6-month Section 16(b) period expires she may choose this tax treatment by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or Internal Revenue Service within thirty (30) days after the lapse Grant Date and by filing a copy of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's his or her tax return for the tax year in which the Purchaser makes Restricted Shares were subjected to the election. Purchaser must also file a copy of the election form with the Companyrestrictions. THE PURCHASER GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING IN A TIMELY MANNER MAY RESULT IN THE RECOGNITION OF COMPENSATION INCOME BY THE GRANTEE, AS THE RESTRICTIONS LAPSE, ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE, IF ANY, AND THE FAIR MARKET VALUE OF THE SHARES OF RESTRICTED STOCK AT THE TIME SUCH RESTRICTIONS LAPSE. THE GRANTEE ACKNOWLEDGES THAT IT IS THE PURCHASER'S GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY'S ’S TO TIMELY FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF ) OF THE PURCHASER REQUESTS CODE. THE GRANTEE ACKNOWLEDGES THAT HE OR SHE SHALL CONSULT HIS OWN TAX ADVISERS REGARDING THE ADVISABILITY OR NON-ADVISABILITY OF MAKING THE ELECTION UNDER SECTION 83(b) OF THE CODE AND ACKNOWLEDGES THAT HE OR SHE SHALL NOT RELY ON THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT ADVISERS FOR SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERADVICE.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986No later than December 31, as amended 1997, Buyer shall prepare and deliver to Seller a schedule (the "CodePrice Allocation Schedule"), taxes ) allocating the modified ADSP (as ordinary income such term is defined in Treasury Regulations Section 1.338(h)(10)-1) among the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right assets of the Company to buy back and the stock pursuant Subsidiaries in accordance with the Treasury regulations promulgated under Section 338(h)(10). Any objections by Seller to the Purchase OptionPrice Allocation Schedule prepared by Buyer shall be raised within 60 business days after the receipt by Buyer of the Price Allocation Schedule. If Buyer and Seller are unable to resolve any differences within 60 business days thereafter, such dispute shall be resolved by the Accounting Referee, and, if necessary, a revised Price Allocation Schedule consistent with the determination made by the Accounting Referee shall be prepared by Buyer as soon as possible thereafter. In all events, the event Price Allocation Schedule shall be finally prepared and agreed upon prior to August 15, 1998. Buyer and Seller shall each pay one-half of the costs, fees and expenses of the Accounting Referee. The Price Allocation Schedule shall be binding on the parties hereto, and Seller and Buyer agree to act in accordance with such Schedule in the preparation, filing and audit of any Tax return. Buyer agrees to pay Seller for the "Section 338 Cost". The Section 338 Cost shall be equal to fifty percent of the excess, if any, of (a) the Tax payable by Seller taking into account the Section 338(h)(10) Election and the deemed liquidation of the Company has registered under and its Subsidiaries and giving effect to the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means price allocation contained in the 6-month period after Price Allocation Schedule (including any Tax payable as a consequence of the triggering of the policyholder surplus account upon the deemed liquidation) over (b) the amount of Tax that would have been payable if the Seller had reported the sale of the Shares for the Purchase Price hereunder on the Closing during which Date, such officersTax being computed in each case using the maximum applicable statutory rate, directors and 10% shareholders are subject to suit under provided, however, that the Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences 338 Cost shall in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERno event exceed $3,500,000.

Election. The (a) Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), ) taxes as ordinary income the difference between the amount paid for the Stock shares and the fair market value of the Stock shares as of the date any restrictions on of the Stock shares lapse. In this context, "restriction" means the right of the Company to buy back the stock shares pursuant to the Purchase Optionpurchase option. In the event the Company has registered under the Securities Exchange ActAct of 1934, "restriction" with respect to officersofficer, directors and 10% shareholders also means the 6six-month period after the Closing purchase of the share during which sales of certain securities by such officers, directors directors, and 10% shareholders are subject would give rise to suit liability under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is shares are purchased rather than when and as the Purchase Option purchase option or 6six-month Section section 16(b) period expires expires, by filing an election under Section 83(b) of the Code with the I.R.S. Internal Revenue Service within thirty (30) days after the date of purchase. Even if the fair market value of the Stock share equals the amount paid for the Stockshares (and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands understand that failure to make this filing in a timely manner will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, purchase option lapses or after the lapse of the 6six-month Section section 16(b) period, on the any difference between the purchase price and the fair market value of the Stock shares at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE TIMELY THE ELECTION UNDER SECTION 83(b), 83 (b) EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.,

Election. The Purchaser understands that Section 83 ---------------------- Proposing Stockholders shall deliver written -------- notice to the Company and the Non-Proposing Stockholders setting forth in reasonable detail the terms of the Internal Revenue Code proposed Sale of 1986, as amended the Company (the "CodeSale ---- Notice"). Within 20 days following receipt of the Sale Notice (the "Election ------ -------- Period"), taxes as ordinary income the difference between Non-Proposing Stockholders shall deliver to the amount paid for the Stock Company and the fair market value ------ Proposing Stockholders written notice setting forth such holders' election (i) to consent to and raise no objections against proposed Sale of the Stock as of Company, and if the date any restrictions on the Stock lapse. In this context, "restriction" means the right Sale of the Company is structured as a sale of stock, to buy back sell their Stockholder Shares on the stock pursuant terms and conditions set forth in the Sale Notice, or (ii) if such Non-Proposing Stockholders hold more than 20% of the Stockholder Shares, to deliver a written offer (a "Stockholder Offer"), upon substantially ----------------- the same terms as described in the Sale Notice, to acquire the Company (a "Stockholder Transaction"). If the Non-Proposing Stockholders have not ----------------------- delivered a Stockholder Offer within such 20-day period, the Proposing Stockholders shall have 180 days after the expiration of the Election Period to consummate the Sale of the Company, or during which the Company may enter into an agreement providing for such a sale, on the terms specified in the Sale Notice. If the Sale of the Company is not consummated or the Company fails to enter into such an agreement within such 180-day period, the Proposing Stockholders shall again comply with the provisions of this Section 6. If the Non-Proposing Stockholders have delivered a Stockholder Offer within the Election Period, the Non-Proposing Stockholders must (A) obtain an executed definitive and binding agreement to consummate the Stockholder Transaction and obtain binding commitments regarding the financing thereof satisfactory in all respects to the Purchase OptionProposing Stockholders both within 30 days after receipt by the Proposing Stockholders of the Stockholder Offer and (B) must consummate the Stockholder Transaction within 120 days after receipt by the Proposing Stockholders of the Stockholder Offer. In If any of the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(bconditions set forth in (A) or (B) of the Exchange Actpreceding sentence is not fulfilled, the Other Stockholders must again comply with the provisions of this Section 6. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) consummation of a Sale of the Code Company or a Stockholder Transaction pursuant to this Section 6(b) shall be in accordance with the I.R.S. Even if the fair market value provisions of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERTexas Business Corporation Act.

Election. The Purchaser understands that Section 83 ---------------------- (b) Seller shall initially prepare a complete set of IRS Forms 8023 and 8883 (and any comparable forms required to be filed under state, local or foreign Tax Laws) and any additional data or material required to be attached to Forms 8023 and 8883 pursuant to Treasury Regulations promulgated under Sections 338 and 1060 of the Internal Revenue Code (collectively "Section 338 Forms"). Seller will use its commercially reasonable efforts to deliver said forms and the Allocation Schedule to Purchaser within sixty (60) days of 1986the Closing, as amended but in any event no later than ninety (90) days after Closing. If Purchaser disagrees with any items reflected on the Allocation Schedule or objects to the manner in which the Section 338 Forms have been prepared, Purchaser shall notify, within twenty (20) business days following the delivery of the Allocation Schedule and the Section 338 Forms by Seller in writing, Seller of such disagreement and its reason for so disagreeing, in which case Purchaser and Seller shall attempt to resolve the disagreement. If the parties have not resolved any such dispute within twenty (20) days following the giving of such written notice by Purchaser, Purchaser and Seller shall jointly retain a nationally recognized independent accounting firm (the "CodeExpert"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value ) whose determination shall be binding on both parties. The Expert shall be instructed to use every reasonable effort to perform its function within thirty (30) days following submission of the Stock dispute to it and, in any case, as soon as practicable after such submission to it. The costs, fees and expenses of the date any restrictions on Expert shall be born equally by Purchaser and Seller. Purchaser and Seller each agree to file the Stock lapseSection 338 Forms in a timely fashion. In this context, "restriction" means To the right of the Company to buy back the stock pursuant to extent that the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period Price is adjusted after the Closing during which such officersDate, directors the parties agree to revise and 10% shareholders are subject amend the Allocation Schedule and the Section 338 Forms in the same manner and according to suit under Section 16(b) the same procedure. The allocation of the Exchange Act. The Purchase Price pursuant to this subsection shall be binding on Seller and Purchaser understands for all Tax reporting purposes except that he may elect neither party shall be unreasonably impeded in its ability and discretion to be taxed at the time the Stock is purchased rather than when and as the Purchase Option negotiate, compromise and/or settle any Tax audit, claim or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERsimilar proceedings.

Election. The Purchaser understands that Section 83 83(a) of ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary ---- income for a nonstatutory stock option and as alternative minimum taxable income for an incentive stock option the difference between the amount paid for the Stock Shares and the fair market value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restriction" means the right of the ----------- Company to buy back the stock Shares pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Repurchase Option set forth in Section 16(b3(a) of the Exchange Actthis Agreement. The Purchaser understands that he Purchaser may elect to be taxed at the time the Stock is purchased Shares are purchased, rather than when and as the Purchase Repurchase Option or 6-month Section 16(b) period expires expires, by filing an election under Section 83(b) (an "83(b) ----- Election") of the Code with the I.R.S. Internal Revenue Service within 30 days from the -------- date of purchase. Even if the fair market value of the Stock Shares at the time of the execution of this Agreement equals the amount paid for the StockShares, the election must be made to avoid income and alternative minimum tax treatment under Section 83(a) in the future. Purchaser understands that failure to file such an election in a timely manner may result in adverse tax consequences for Purchaser. Purchaser further understands that an additional copy of such election form should be filed with his or her federal income tax return for the calendar year in which the futuredate of this Agreement falls. Purchaser acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser's death. The form for making this election is attached as Exhibit A-3 ----------- hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE TIMELY THE ELECTION UNDER SECTION 83(b83(B), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section 83 ---------------------- 83(a) of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income for a nonstatutory stock option the difference between the amount paid for the Stock Shares and the fair market value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restriction" means the right of the Company to buy back the stock Shares pursuant to the Purchase Repurchase Option set forth in Section 8(a) of this Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he Purchaser may elect to be taxed at the time the Stock is purchased Shares are purchased, rather than when and as the Purchase Repurchase Option or 6-month Section 16(b) period expires expires, by filing an election under Section 83(b) (an "83(b) Election") of the Code with the I.R.S. Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value of the Stock Shares at the time of the execution of this Option equals the amount paid for the StockShares, the election must be made to avoid adverse income and alternative minimum tax consequences treatment under Section 83(a) in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing file such an election in a timely will manner may result in the recognition of ordinary income by the adverse tax consequences for Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser further understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed an additional copy of such election form should be filed with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's his or her federal income tax return for the tax calendar year in which the Purchaser makes the electiondate of this Option falls. Purchaser must also file acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser's death. Purchaser agrees that he or she will execute and deliver to the Company with this executed Option a copy of the election form Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the "Acknowledgment") attached hereto as Exhibit C. Purchaser further agrees that he or she will execute and submit with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION Acknowledgment a copy of the 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERElection attached hereto as Exhibit D (for income tax purposes in connection with the early exercise of a nonstatutory stock option) if Purchaser has indicated in the Acknowledgment his or her decision to make such an election.

Election. The Purchaser understands that Sellers and Buyer shall join in making a timely election (but in no event later than sixty (60) days following the Closing) under Section 83 ---------------------- 338(h)(10) of the Internal Revenue Code (including the prerequisite election under Section 338 of 1986the Code) and any similar state law provisions in all applicable states, with respect to the sale and purchase of WPC Shares pursuant to this Agreement, and each party shall provide to the others all necessary information to permit such elections to be made. Such election shall be structured to qualify the First Earned Payout Amount and the Second Earned Payout Amount as two separate obligations. Buyer and the Sellers shall, as amended promptly as practicable following the Closing Date, take all actions necessary and appropriate (including filing such forms, returns, schedules and other documents as may be required) to effect and preserve timely elections; provided, however, that Buyer shall be the party responsible for preparing and filing the forms, returns, schedules and other documents necessary for making an effective and timely election. All Taxes attributable to the elections made pursuant to this Section 6(g) shall be the liability of the Sellers. In connection with such elections, within sixty (60) days following the Closing Date, Buyer and the Sellers shall act together in good faith to determine and agree upon the "Code"), taxes as ordinary income the difference between the amount paid for the Stock deemed sale price" to be allocated to each asset of WPC in accordance with Treasury Regulation Section 1.338(h)(10)-1(f) and the other regulations under Section 338 of the Code. Notwithstanding the generality of the immediately preceding sentence, Buyer and the Sellers agree that the "DEEMED SALE PRICE" shall be allocated to the fixed assets at their book value as of December 31, 1997 and the monetary assets of WPC at their fair market value of the Stock as of the date any restrictions Closing Date as determined as part of the determination of the Net Working Capital of WPC in accordance with Section 2(e) hereof and the balance of the "deemed sale price" shall be allocated to goodwill and other intangible assets of WPC. To the fullest extent permitted by law, the allocation of goodwill with respect to each office of WPC shall be made on the Stock lapsebasis of prior year's earnings attributable to each office. In this context, "restriction" means Both Buyer and the right Sellers shall report the tax consequences of the Company to buy back the stock pursuant to the Purchase Optiontransactions contemplated by this Agreement consistently with such allocations and shall not take any position inconsistent with such allocations in any Tax Return or otherwise. In the event that Buyer and the Company has registered under the Exchange ActSellers are unable to agree as to such allocations, "restriction" Buyer's reasonable positions with respect to officerssuch allocations shall control. The Sellers shall be liable for, directors and 10% shareholders also means shall indemnify and hold Buyer and WPC harmless against, any Taxes or other costs attributable to (i) a failure on the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) part of the Exchange Act. The Purchaser understands that he may elect Sellers to be taxed at the time the Stock is purchased rather than when and as the Purchase Option take all actions required of him under this Section 6(g); or 6-month Section 16(b(ii) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that a failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value part of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires WPC to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files qualify as an "S corporation" for federal and/or state income tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERpurposes.

Election. The Purchaser understands that Section 83 ---------------------- 83(a) of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount paid for the Stock Shares and the fair market value Fair Market Value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "“restriction" ” means the right of the Company to buy back the stock Shares pursuant to the Purchase OptionRepurchase Option set forth in Section 3(a) above. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he Purchaser may elect to be taxed at the time the Stock is purchased Shares are purchased, rather than when and as the Purchase Repurchase Option or 6-month Section 16(b) period expires expires, by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the I.R.S. Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value Fair Market Value of the Stock Shares at the time of the execution of this Agreement equals the amount paid for the StockShares, the election must be made to avoid adverse tax consequences income under Section 83(a) in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing file such an election in a timely will manner may result in the recognition of ordinary income by the adverse tax consequences for Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser further understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed an additional copy of such election form should be filed with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's ’s federal income tax return for the tax calendar year in which the Purchaser makes the electiondate of this Agreement falls. Purchaser must also file acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, does not purport to be complete, and is not intended or written to be used, and cannot be used, for the purposes of avoiding taxpayer penalties. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death, and Purchaser has consulted, and has been fully advised by, Purchaser’s own tax advisor regarding such tax laws and tax consequences or has knowingly chosen not to consult such a tax advisor. Purchaser further acknowledges that neither the Company nor any subsidiary or representative of the Company has made any warranty or representation to Purchaser with respect to the tax consequences of Purchaser’s purchase of the Shares or of the making or failure to make an 83(b) Election. PURCHASER (AND NOT THE COMPANY, ITS AGENTS OR ANY OTHER PERSON) SHALL BE SOLELY RESPONSIBLE FOR APPROPRIATELY FILING SUCH FORM WITH THE IRS, EVEN IF PURCHASER REQUESTS THE COMPANY, ITS AGENTS OR ANY OTHER PERSON MAKE THIS FILING ON PURCHASER’S BEHALF. Xxxxxxxxx agrees that Purchaser will execute and deliver to the Company with this executed Agreement a copy of the election form with Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b“Acknowledgment”), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(Battached hereto as Exhibit B and, if Purchaser decides to make an 83(b) ELECTION IS A CONDITION TO THE SALEElection, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.a copy of the 83(b) Election, attached hereto as Exhibit C.

Election. The Purchaser understands that Section 83 ---------------------- Proposing Stockholders shall deliver written notice to the Company and the Other Stockholders setting forth in reasonable detail the terms of the Internal Revenue Code proposed Sale of 1986, as amended the Company (the "CodeSale Notice"). Within 15 days following delivery of the Sale Notice (the "Election Period"), taxes as ordinary income each Other Stockholder shall deliver to the difference between the amount paid for the Stock Company and the fair market value of Proposing Stockholders written notice setting forth such holder's election (i) to consent to and raise no objections against the Stock as of transaction described in the date any restrictions on Sale Notice, and if the Stock lapse. In this context, "restriction" means the right Sale of the Company is structured as a sale of stock, to buy back sell their Stockholder Shares on the stock pursuant terms and conditions set forth in the Sale Notice, or (ii) if such Other Stockholder or Stockholders hold more than 20% of the Stockholder Shares, to deliver a written offer (a "Stockholder Offer"), upon substantially the same terms as described in the Sale Notice, to acquire the Company (a "Stockholder Transaction"). If the Other Stockholders have not delivered a Stockholder Offer within the Election Period, the Proposing Stockholders shall have 180 days after the expiration of the Election Period to consulate the Sale of the Company on the terms specified in the Sale Notice. If the Sale of the Company is not consummated within such 180-day period, the Proposing Stockholders shall comply with the provisions of this paragraph 7 for any subsequent Sale of the Company, If the Other Stockholders have delivered a Stockholder Offer within the Election Period, the Other Stockholders must (A) obtain an executed definitive and binding agreement to consummate the Stockholder Transaction and obtain binding commitments from reputable sources for the financing thereof both within 30 days after delivery to the Purchase OptionProposing Stockholder of the Stockholder Offer and (B) consummate the Stockholder Transaction within 120 days after delivery to the Proposing Stockholder of the Stockholder Offer. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(bIf any condition set forth in (A) or (B) of the Exchange Act. The Purchaser understands that he may elect to be taxed at preceding sentence is not fulfilled, the time Other Stockholders shall comply with the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) provisions of this paragraph 7 for any subsequent Sale of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Each Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company Corporation to buy back the stock pursuant to the Purchase Option. In the event the Company Corporation has registered its securities under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6six-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Each Purchaser understands that if such provision is applicable to him or her he or she may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6six-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. within thirty (30) days from the date of purchase. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached heretowill be made available by the Corporation upon request of any Purchaser. The Each Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the such Purchaser, as the Purchase Option lapses, or after the lapse of the 6-six month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Each Purchaser further understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files income tax returns within 30 days laws of the date State of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the CompanyConnecticut contain provisions similar to Section 83. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANYCORPORATION'S TO FILE TIMELY THE ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(b)) AND UNDER ANY CORRESPONDING PROVISIONS OF STATE TAX LAW, EVEN IF THE PURCHASER REQUESTS THE COMPANY CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser Employee understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "“restriction" ” means the right of the Company Corporation to buy back the stock Stock pursuant to to, for example, the Purchase Repurchase Option. In the event the Company Corporation has registered its securities under the Exchange Act, "“restriction" ” with respect to officers, directors and 10% shareholders stockholders also means the 6six-month period after the Closing purchase during which such officers, directors and 10% shareholders stockholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser Employee understands that if such provision is applicable to him, he may elect to be taxed at the time the shares of Stock is are purchased rather than when and as the Purchase Repurchase Option or 6six-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. IRS within thirty (30) days from the date of purchase. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made for it to avoid adverse tax consequences in the futureapply. The form for making this election is attached hereto. The Purchaser Employee understands that failure to make this filing timely will result in the recognition of ordinary income by the PurchaserEmployee, as the Purchase any Repurchase Option lapses, or after the lapse of the 6six-month Section 16(b) period, on the difference between the purchase price Purchase Price and the fair market value of the Stock at the time such restrictions lapse. Purchaser The Employee further understands that if Purchaser desires the income tax laws of Employee’s state of residence may contain provisions similar to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase83. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER EMPLOYEE ACKNOWLEDGES THAT IT IS THE PURCHASER'S EMPLOYEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY'S CORPORATION’S TO FILE TIMELY THE ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(b)) AND UNDER ANY CORRESPONDING PROVISIONS OF STATE TAX LAW, EVEN IF THE PURCHASER EMPLOYEE REQUESTS THE COMPANY CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S EMPLOYEE’S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION EMPLOYEE SHOULD CONSULT HIS OWN TAX ADVISOR AS TO THE SALE, TAX CONSEQUENCES OF THIS PURCHASE RIGHT. IRS RULES AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERGUIDANCE MAY CHANGE.

Election. The Purchaser understands that Section 83 ---------------------- Upon receipt of the Internal Revenue Code of 1986Sale Notice, as amended the MDP Partner Group shall elect either (i) to approve, authorize and permit the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value Property to be sold pursuant to a transaction that will generate at least 97% of the Stock as Net Equity or (ii) to purchase the DB Partner Group Interest at a price equal to the DB Partner Payment and on the terms set forth in the Sale Notice. The MDP Partner Group shall give notice of its election hereunder to DBRE within thirty (30) days after the MDP Partner Group’s receipt of the date any restrictions on Sale Notice; provided, however, that in the Stock lapse. In event the MDP Partner Group shall fail to give DBRE notice of its election within such thirty (30) day period, the MDP Partner Group shall be conclusively deemed to have elected that the Property be sold as provided in clause (i) of this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase OptionSection 7.9(6). In the event the Company has registered MDP Partner Group elects or is deemed to have elected so to permit the Property to be sold, DBRE shall have nine (9) months (commencing with the date upon which DBRE receives such written election or the date it is deemed to have occurred) to market the Property on terms which would generate at least 97% of the Net Equity. If within such nine (9) month period, the Partnership shall receive a bona fide all cash written offer from a buyer to purchase the Property (which may include assumption by the prospective buyer of the debt then encumbering the Property, provided such assumption is allowable under the Exchange Act, "restriction" with respect terms of such debt and related security) which the DB Partner Group desires to officers, directors and 10accept (a “Purchase Offer”) pursuant to a transaction that will generate at least 97% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when Net Equity and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or close within 120 days after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermorethe Purchase Offer, Purchaser acknowledges that Purchaser must file an election form with then, at the direction of DBRE, the General Partner, on behalf of the Partnership, shall accept such I.R.S. Center Purchase Offer and the sale of the Property shall thereafter be closed in accordance with the Purchaser's tax return for the tax year in which the Purchaser makes the electionterms of such Purchase Offer. Purchaser must also file The closing of such a copy sale of the election form with Property shall take place at such time, date and place, and on such terms, as are agreed between DBRE and the Companybuyer, subject to the provisions of this Section 7.9; provided, however, that so long as the transaction will generate at least 97% of the Net Equity, the DB Partner Group will not be required to submit a new Sale Notice to the MDP Partner Group in the event such terms include representations, warranties, guaranties or indemnities regarding the condition of the Property or the nature or quality of construction thereof as described in Section 7.9(a). THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b)Notwithstanding the foregoing, EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALFthe DB Partner Group will be required to submit a new Sale Notice if any of the aforementioned agreed upon terms between DBRE and the buyer include direct or indirect income guaranties or indemnifications which will benefit the buyer to a greater extent than that which is described in the then existing Sale Notice. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALEIf the Property is sold pursuant to a Sale Notice, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.the Partnership shall pay all Seller Transaction Costs required to be paid by the Partnership as the seller pursuant to such transaction,

Election. The Purchaser Director understands that under Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount Purchase Price, if any, paid for the Stock Restricted Shares and the their fair market value of the Stock as of on the date any forfeiture restrictions on the Stock lapseapplicable to such Restricted Shares lapse will be reportable as ordinary income at that time. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser Director understands that he Director may elect to be taxed at the time the Stock is purchased Restricted Shares are acquired hereunder to the extent the fair market value of the Restricted Shares differs from the Purchase Price, if any, rather than when and as the Purchase Option or 6-month Section 16(b) period expires such Restricted Shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the I.R.S. Even if within thirty (30) days after the Date of Grant. If the fair market value of the Stock Restricted Shares at the Date of Grant equals the amount Purchase Price paid for the Stock(and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit B hereto. The Purchaser Director understands that failure to make this filing timely within the 30-day period will result in the recognition of ordinary income by Director (in the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and event the fair market value of the Stock at Restricted Shares increases after the time such Date of Grant) as the forfeiture restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER DIRECTOR ACKNOWLEDGES THAT IT IS THE PURCHASERDIRECTOR'S SOLE RESPONSIBILITY RESPONSIBILITY, AND NOT THE COMPANY'S 'S, TO FILE A TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER DIRECTOR REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASERDIRECTOR'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION DIRECTOR IS A CONDITION RELYING SOLELY ON DIRECTOR'S ADVISORS WITH RESPECT TO THE SALE, AND THAT THE COMPANY SHALL DECISION AS TO WHETHER OR NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERFILE AN 83(b) ELECTION.

Election. The At Purchaser's option, Purchaser understands that Section 83 ---------------------- and Seller shall join in timely making an election under section 338(h)(10) of the Internal Revenue Code (and any corresponding elections under state, local, or foreign tax law) (collectively, a "Section 338(h)(10) Election") with respect to the purchase and sale of 1986Paramount Parks and, if such election is made, at Purchaser's option, with respect to Paramount Parks Experience, Inc. and Interco (if applicable); provided, for the avoidance of doubt, that no such election shall be made with respect to Kings Island. Purchaser and Seller shall cooperate in the completion and timely filing of such elections in accordance with the provisions of Treasury Regulations section 1.338(h)(10)-1 (or any comparable provisions of state, local or foreign Tax law) or any successor provision. Seller and Purchaser agree not to take any action that could cause the Section 338(h)(10) Election to be invalid, and shall take no position contrary thereto unless required pursuant to a final determination (as amended defined in Section 1313(a) of the Code or any similar provision of any state, foreign or local law). Within ninety (90) days following the Closing Date, Purchaser shall prepare and deliver to Seller a draft schedule allocating the "Code"aggregate deemed sales price," within the meaning of the Treasury regulations issued under Section 338(h)(10), taxes as ordinary income among the difference between the amount paid for the Stock assets of Paramount Parks and the fair market value Paramount Parks Experience, Inc. in accordance with such regulations. Within forty-five (45) days of its receipt of such draft allocation schedule, Seller shall provide Purchaser with a written notice of any proposed changes thereto, together with a detailed explanation of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Optionbasis for such proposed changes. In the event that the Company has registered under Parties cannot agree on an allocation schedule within sixty (60) days after Purchaser's receipt of Seller's notice of proposed changes, the Exchange Act, "restriction" with respect dispute shall be referred to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange ActAccounting Firm. The allocation determined by the Accounting Firm shall be conclusive and binding upon Purchaser understands that he may elect and Seller, and each party shall file its Tax Returns in accordance with such allocation schedule. Notwithstanding the foregoing, the allocation under this Section 7.8 to Interco shall be taxed at consistent with the time the Stock is purchased rather than when and determination of "Fair Market Value," as provided under Schedule III. Tax Treatment of Indemnity Payments . The parties agree to treat any indemnity payment made under this Article VII or Article IX as an adjustment to the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid Price for the Stockall federal, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaserstate, as the Purchase Option lapseslocal and foreign Tax purposes, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapseparties agree to, and shall cause their respective Affiliates to, file their Tax Returns accordingly. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S CONDITIONS TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.CLOSING

Election. The Purchaser understands Neither Seller nor Buyer shall take any action (or omit to take any action) that Section 83 ---------------------- would jeopardize the effectiveness of the Internal Revenue Code Section 338(h)(10) Election. Without limiting the generality of 1986the foregoing, Buyer represents that it has no plan or intention to merge or liquidate Buyer or HCC. Buyer also covenants that it will not merge or liquidate Buyer or HCC for at least two years, other than in connection with a sale or other disposition of an interest in the KB Toy Business to a third party, without Seller's prior written consent. Buyer represents that it has no plan or intention to merge or liquidate Buyer or HCC in connection with a sale or other disposition of an interest in the KB Toy Business during such two-year period or otherwise. Seller and Buyer agree to cooperate (and cause their respective Affiliates to cooperate) in all respects for the purpose of effectuating a timely and effective Section 338(h)(10) Election, including, without limitation, the execution and filing of any forms or returns. The Section 338(h)(10) Election shall properly reflect the Price Allocation (as amended hereinafter defined). Within 12 0 days after the Closing Date, Seller shall deliver to Buyer a statement (the "CodeAllocation Statement"), taxes ) allocating the ADSP (as ordinary income such term is defined in Temporary Treasury Regulations Sections 1.338-4T and 1.338(h)(10)-1T) among the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right assets of the Company to buy back and its Subsidiaries in accordance with the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit Treasury regulations promulgated under Section 16(b) of 338(h)(10). Buyer shall have the Exchange Actright to review the Allocation Statement. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns If within 30 days after receipt of the date Allocation Statement Buyer notifies Seller in writing that the allocation of purchaseone or more items reflected in the Allocation Statement is not a reasonable allocation, Buyer and Seller will negotiate in good faith to resolve such dispute. FurthermoreIf Buyer and Seller fail to resolve such dispute within 30 days, Purchaser acknowledges that Purchaser must file an election form such dispute shall be resolved by the Accounting Referee in accordance with Section 13.07. If Buyer does not respond within the 30-day period, or upon resolution of the disputed items, the allocation reflected in the Allocation Statement (as such I.R.S. Center may have been adjusted) shall be the "Price Allocation," which shall be binding upon the parties hereto. Seller and Buyer agree to act in accordance with the Purchaser's tax return for Price Allocation in the tax year in which the Purchaser makes the election. Purchaser must also file a copy preparation and filing of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERany Tax return.

Election. The Purchaser understands that Section 83 ---------------------- If in Buyer's sole discretion such an election is deemed to be desirable, the Island Sellers and Buyer shall join in making a timely election (but in no event later than the 15th day of the Internal Revenue ninth full calendar month after the month in which the Closing Date occurs) under Section 338(h)(10) of the Code (including the prerequisite election under Section 338 of 1986the Code) and any similar state law provisions in all applicable states which permit corporations to make such elections, with respect to the sale and purchase of the Island Shares pursuant to this Agreement, and each party shall provide the others all necessary information to permit such elections to be made. Buyer and the Island Sellers shall, as amended promptly as practicable following the Closing Date, take all actions necessary and appropriate (including filing such forms, returns, schedules and other documents as may be required) to effect and preserve timely elections; provided, however, that Buyer shall be the party responsible for preparing and filing the forms, returns, schedules and other documents necessary for making an effective and timely election. All Taxes attributable to the elections made pursuant to this Section 6.5(c) shall be the liability of the Island Sellers; provided, however, that Buyer shall reimburse Sellers for 66.67% of any additional Taxes incurred as a result of such elections (up to a maximum reimbursement of $200,000). Such reimbursement shall be made in accordance with the Tax Payments Schedule attached hereto. In connection with such elections, following the Closing Date, Buyer and the Island Sellers shall act together in good faith to determine and agree upon the "deemed sales price" to be allocated to each asset of Island in accordance with Treasury Regulation Section 1.338(h)(10)-1(f) and the other regulations under Section 338 of the Code"), taxes as ordinary income . The portion of the Purchase Price allocable to ITR shall be equal to the difference between the amount paid for the Stock $1,000,000 and the total liabilities of ITR assumed by the Buyer. The balance of the Purchase Price, including the entire Earned Payout Amount, if any, shall be allocated to Island. Notwithstanding the generality of the immediately preceding two sentences, Buyer and the Island Sellers agree that the "deemed sales price" allocated to Island shall be allocated as follows: (i) the monetary assets of Island shall be allocated at their fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right Effective Date as determined as part of the Company to buy back determination of the stock pursuant Net Worth of the Companies in accordance with Section 2.7 hereof, (ii) $50,000 shall be allocated to the Purchase Optioncovenant not to compete contained in Section 6.4 hereof, and (iii) the balance of the "deemed sales price" allocated to Island shall be allocated to the fixed assets, goodwill and other intangible assets of Island. Both Buyer and the Sellers shall report the tax consequences of the transactions contemplated by this Agreement consistently with such allocations and shall not take any position inconsistent with such allocations in any Tax Return or otherwise. In the event that Buyer and the Company has registered under the Exchange ActIsland Sellers are unable to agree as to such allocations, "restriction" Buyer's reasonable positions with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERallocations shall control.

Election. The Purchaser Employee understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "“restriction" ” means the right of the Company Corporation to buy back the stock Stock pursuant to to, for example, the Purchase Repurchase Option. In the event the Company Corporation has registered its securities under the Exchange Act, ". “restriction" ” with respect to officers, directors and 10% shareholders stockholders also means the 6six-month period after the Closing purchase during which such officers, directors and 10% shareholders stockholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser Employee understands that if such provision is applicable to him, he may elect to be taxed at the time the shares of Stock is are purchased rather than when and as the Purchase Repurchase Option or 6six-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. IRS within thirty (30) days from the date of purchase. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made for it to avoid adverse tax consequences in the futureapply. The form for making this election is attached hereto. The Purchaser Employee understands that failure to make this filing timely will result in the recognition of ordinary income by the PurchaserEmployee, as the Purchase any Repurchase Option lapses, or after the lapse of the 6six-month Section 16(b) period, on the difference between the purchase price Purchase Price and the fair market value of the Stock at the time such restrictions lapse. Purchaser The Employee further understands that if Purchaser desires the income tax laws of Employee’s state of residence may contain provisions similar to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase83. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER EMPLOYEE ACKNOWLEDGES THAT IT IS THE PURCHASER'S EMPLOYEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY'S CORPORATION’S TO FILE TIMELY THE ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(b)) AND UNDER ANY CORRESPONDING PROVISIONS OF STATE TAX LAW, EVEN IF THE PURCHASER EMPLOYEE REQUESTS THE COMPANY CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S EMPLOYEE’S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION EMPLOYEE SHOULD CONSULT HIS OWN TAX ADVISOR AS TO THE SALE, TAX CONSEQUENCES OF THIS PURCHASE RIGHT. IRS RULES AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERGUIDANCE MAY CHANGE.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986(a) Seller and Buyer (or their applicable affiliates) shall make a timely, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock effective and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an irrevocable joint election under Section 83(b338(h)(10) of the Code and, upon mutual written consent of Seller and Buyer, under any comparable statutes in any other jurisdiction, in each case with the I.R.S. Even if the fair market value respect to Buyer’s purchase of the Stock equals under this Agreement (collectively, the amount paid “Section 338(h)(10) Election”). Seller will pay any tax, interest and penalties (collectively “Tax”) attributable to the making of a Section 338(h)(10) Election and will indemnify Buyer and its affiliates against any such Tax. The Section 338(h)(10) Election shall properly reflect the Price Allocation (as hereinafter defined). Within 120 calendar days after the Closing Date, Buyer shall deliver to Seller a separate statement for the StockCompany (“Allocation Statement”) allocating the ADSP (as such term is defined in Treasury Regulations Section 1.338-4) of the assets of the Company, in accordance with the Treasury Regulations under Section 338(h)(10) of the Code. If within thirty (30) calendar days after receipt of the Allocation Statement Seller notifies Buyer in writing that the allocation of one or more items reflected in the Allocation Statement is not a reasonable allocation, Buyer and Seller will negotiate in good faith to resolve such dispute. If Buyer and Seller fail to resolve such dispute within thirty (30) calendar days, then within five (5) days after the end of such 30-day period Buyer and Seller shall choose a nationally recognized law or accounting firm that is mutually acceptable to both of the parties (the “Tax Referee”), and the Tax Referee shall as promptly as practicable determine whether the allocation was reasonable and, if not reasonable, shall appropriately revise the Allocation Statement. The costs, fees and expenses of the Tax Referee shall be borne equally by Buyer and Seller. If Seller does not respond within thirty (30) calendar days, or upon resolution of the disputed items, the election must allocation reflected on the Allocation Statement (as such may have been adjusted) shall be made the “Price Allocation” and shall be binding on the parties hereto. Seller and Buyer agree to avoid adverse tax consequences act, and to cause their respective affiliates to act, in accordance with the Price Allocation in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this preparation, filing timely will result in and audit of any tax return, including the recognition preparation of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form filing with the I.R.S. Center in which Purchaser files their respective tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b(including IRS Form 8883), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser Xxxxxxx understands that under Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount Purchase Price paid for the Stock Purchased Shares and the their fair market value of the Stock as of on the date any forfeiture restrictions on applicable to such shares lapse will be reportable as ordinary income at that time. For this purpose, the Stock lapse. In this context, term "restrictionforfeiture restrictions" means includes the right of the Company to buy back repurchase the stock Purchased Shares pursuant to the Purchase OptionRepurchase Right set forth in Section 3 below. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser Xxxxxxx understands that he she may elect to be taxed at the time the Stock is purchased Purchased Shares are acquired hereunder to the extent the fair market value of the Purchased Shares differs from the Purchase Price rather than when and as the Purchase Option or 6-month Section 16(b) period expires such Purchased Shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the I.R.S. Even if within thirty (30) days after the date of purchase hereunder. If the fair market value of the Stock Purchased Shares at the date of purchase equals the amount Purchase Price paid for the Stock(and therefore no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser Xxxxxxx understands that failure to make this filing timely within the thirty (30) day period will result in the recognition of ordinary income by Xxxxxxx (in the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and event the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of Purchased Shares increases after the date of purchase) as the forfeiture restrictions lapse. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER XXXXXXX ACKNOWLEDGES THAT IT IS THE PURCHASER'S XXXXXXX'X SOLE RESPONSIBILITY RESPONSIBILITY, AND NOT THE COMPANY'S 'S, TO FILE A TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER XXXXXXX REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S HER BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION XXXXXXX IS A CONDITION RELYING SOLELY ON HER ADVISOR'S WITH RESPECT TO THE SALE, AND THAT THE COMPANY SHALL DECISION AS TO WHETHER OR NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERFILE AN 83(b) ELECTION.

Election. The Purchaser understands that Section 83 ---------------------- (b) Seller shall initially prepare a complete set of IRS Forms 8023 and 8883 (and any comparable forms required to be filed under state, local or foreign Tax Laws) and any additional data or material required to be attached to Forms 8023 and 8883 pursuant to Treasury Regulations promulgated under Sections 338 and 1060 of the Internal Revenue Code (collectively "SECTION 338 FORMS"). Seller will use its commercially reasonable efforts to deliver said forms and the Allocation Schedule to Purchaser within sixty (60) days of 1986the Closing, as amended but in any event no later than ninety (90) days after Closing. If Purchaser disagrees with any items reflected on the Allocation Schedule or objects to the manner in which the Section 338 Forms have been prepared, Purchaser shall notify, within twenty (20) business days following the delivery of the Allocation Schedule and the Section 338 Forms by Seller in writing, Seller of such disagreement and its reason for so disagreeing, in which case Purchaser and Seller shall attempt to resolve the disagreement. If the parties have not resolved any such dispute within twenty (20) days following the giving of such written notice by Purchaser, Purchaser and Seller shall jointly retain a nationally recognized independent accounting firm (the "CodeEXPERT"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value ) whose determination shall be binding on both parties. The Expert shall be instructed to use every reasonable effort to perform its function within thirty (30) days following submission of the Stock dispute to it and, in any case, as soon as practicable after such submission to it. The costs, fees and expenses of the date any restrictions on Expert shall be born equally by Purchaser and Seller. Purchaser and Seller each agree to file the Stock lapseSection 338 Forms in a timely fashion. In this context, "restriction" means To the right of the Company to buy back the stock pursuant to extent that the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period Price is adjusted after the Closing during which such officersDate, directors the parties agree to revise and 10% shareholders are subject amend the Allocation Schedule and the Section 338 Forms in the same manner and according to suit under Section 16(b) the same procedure. The allocation of the Exchange Act. The Purchase Price pursuant to this subsection shall be binding on Seller and Purchaser understands for all Tax reporting purposes except that he may elect neither party shall be unreasonably impeded in its ability and discretion to be taxed at the time the Stock is purchased rather than when and as the Purchase Option negotiate, compromise and/or settle any Tax audit, claim or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERsimilar proceedings.

Election. The Purchaser understands that Under Section ---------------------------------------------------------- 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and excess of the fair market value of the Stock as of Purchased Shares, on the date any forfeiture restrictions applicable to such shares lapse, over the Purchase Price paid for such shares will be reportable as ordinary income on the Stock lapselapse date. In For this contextpurpose, the term "restrictionforfeiture restrictions" means includes the right of the Company to buy back repurchase the stock Purchased Shares pursuant to the Purchase OptionRepurchase Right. In the event the Company has registered under the Exchange ActHowever, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he Founder may elect under Code Section 83(b) to be taxed at the time the Stock is purchased Purchased Shares are acquired, rather than when and as such Purchased Shares cease to be subject to such forfeiture restrictions. Such election must be filed with the Purchase Option or 6-month Section 16(bInternal Revenue Service within thirty (30) period expires by filing an election under Section 83(b) days after the date of the Code with the I.R.S. Agreement. Even if the fair market value of the Stock Purchased Shares on the date of the Agreement equals the amount Purchase Price paid for the Stock(and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached heretoas an Exhibit. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES FAILURE TO MAKE THIS FILING ON ------- WITHIN THE PURCHASER'S BEHALFAPPLICABLE THIRTY (30) DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY FOUNDER AS THE FORFEITURE RESTRICTIONS LAPSE. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALEAPPENDIX The following definitions shall be in effect under the Agreement: Agreement shall mean this Stock Purchase Agreement. --------- Cause shall mean Founder's deliberate and consistent refusal to perform ----- Founder's duties or deliberate and consistent refusal to conform to or follow any reasonable policy adopted by the Company's Board, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.Founder's unauthorized use or disclosure of the confidential information or trade secrets of the Company, Founder's conviction of a felony under the laws of the United States or any state thereof, or Founder's gross misconduct. Change in Control shall mean: -----------------

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock i) Transferor and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company Transferee agree to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing make an election under Section 83(b338(h)(10) of the Code (collectively, the “Section 338(h)(10) Election”) with respect to the sale of the Shares hereunder. Within 120 calendar days after Closing, Transferor shall provide Transferee with a proposed allocation of the Purchase Price for the deemed asset sale (and other relevant items) (the “Purchase Price Allocation”), for Transferee’s review and comment. The Purchase Price Allocation shall be reasonable and shall be prepared in accordance with Section 338(h)(10) of the Code and the Treasury Regulations thereunder. If, within 30 calendar days following Transferor’s delivery of the Purchase Price Allocation, Transferee does not notify Transferor of its disagreement with the I.R.S. Even if Purchase Price Allocation, then the fair market value Purchase Price Allocation shall be final and binding. If within such 30-calendar day period Transferee so notifies Transferor, then Transferor and Transferee shall cooperate in good faith to revise and finalize the Purchase Price Allocation. If Transferor and Transferee are unable to agree on the Purchase Price Allocation within 60 calendar days after the date Transferor provides the Purchase Price Allocation to Transferee, they shall request that any disputed items be resolved by an independent accounting firm jointly selected by Transferor and Transferee (the “Accountant”). The cost of the Stock equals the amount paid for the Stock, the election must Accountant shall be made to avoid adverse tax consequences in the futureborne one-half by Transferor and one-half by Transferee. The form parties shall cooperate with each other in preparing IRS Forms 8023 and 8883 and any other applicable filings. Unless required by law, neither party shall take any position on any income Tax Return (including IRS Forms 8023 and 8883) nor for making this election any other income Tax purpose that is attached hereto. The Purchaser understands that failure to make this filing timely will result in inconsistent with the recognition of ordinary income by the Purchaser, as Section 338(h)(10) Election and the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERPrice Allocation.

Election. The Purchaser understands that Section 83 ---------------------- Buyer shall prepare an allocation of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock Purchase Price and the fair market value estimated liabilities of the Stock Company (plus other relevant items) as of the date any restrictions on Closing Date among the Stock lapse. In this context, "restriction" means the right assets of the Company and the covenants described in Section 3.3 (the “Asset Allocation”), which Asset Allocation shall be prepared in a manner consistent with Code Sections 338 and 1060 and the regulations promulgated thereunder. The Asset Allocation shall include allocations to buy back each category of assets that would be taxable under Section 1366 of the stock pursuant Code upon disposition by the Company at a rate in excess of the lowest capital gain rate provided for under the Code. Not later than one-hundred twenty (120) days after the Closing Date, Buyer shall provide the Shareholders the Asset Allocation for the Shareholders’ review. The Asset Allocation schedule will be binding on the Parties if (a) the Shareholders fail to object in writing within thirty (30) days after receipt of the Asset Allocation or (b) the Shareholders approve the Asset Allocation in a written notice that specifically states such approval and references this Section 1.8(a). If the Shareholders do not agree with the Asset Allocation, and Buyer and the Shareholders cannot mutually agree on revisions to the Purchase Option. In same, then within thirty (30) days following the event Shareholders’ objection to the Asset Allocation (or such later date as may be mutually agreed by Buyer and the Shareholders), Buyer, the Company has registered under and the Exchange ActShareholders shall engage the Neutral Auditor, "restriction" which shall within thirty (30) days after such engagement resolve the allocation of the consideration and any items with respect to officerswhich there is a dispute between the Parties. If such a review is conducted, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) then each of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) periodBuyer, on the difference between the purchase price one hand, and the fair market value Shareholders (each in accordance with their respective Pro Rata Portions), on the other hand, shall pay fifty percent (50%) of all the Neutral Auditor’s fees and expenses associated with such review, and the determination of the Stock at Neutral Auditor shall be binding on the time such restrictions lapseParties. Purchaser understands that if Purchaser desires to make a Section 83 electionNeither Buyer, Purchaser must file a properly completed and executed election form the Company, their respective Affiliates nor the Shareholders shall take any position inconsistent with the I.R.S. Center allocation as finally determined pursuant to this Section 1.8(a) in which Purchaser files tax returns within 30 days connection with any Tax Return or other matter related to Taxes, unless otherwise required by applicable Law. Buyer and the Shareholders shall cooperate in the filing of any forms (including any Internal Revenue Service Form 8023 and any other forms required under state, local or foreign Law) with respect to the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year allocation described in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(bthis Section 1.8(a), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that ---------------------- Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands and the Principal understand that Section 83 ---------------------- 83(a) of the Internal Revenue Code of 1986, as amended (the "CodeCODE"), taxes as ordinary income the difference between the amount paid for the Stock Shares and the fair market value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restrictionRESTRICTION" means the right of the Company to buy back the stock Shares pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Repurchase Option set forth in Section 16(b3(a) of this Agreement. Purchaser and the Exchange Act. The Principal understand that Purchaser understands that he may elect to be taxed at the time the Stock is purchased Shares are purchased, rather than when and as the Purchase Repurchase Option or 6-month Section 16(b) period expires expires, by filing having the Principal file an election under Section 83(b) (an "83(b) ELECTION") of the Code with the I.R.S. Internal Revenue Service within 30 days from the date of purchase. Even if the fair market value of the Stock Shares at the time of the execution of this Agreement equals the amount paid for the StockShares, the election must be made to avoid adverse tax consequences income under Section 83(a) in the future. The form for making this election is attached hereto. The Purchaser understands and the Principal understand that failure to make this filing file such an election in a timely will manner may result in the recognition of ordinary income by the adverse tax consequences for Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price . Purchaser and the fair market value Principal further understand that an additional copy of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form should be filed with the I.R.S. Center in which Purchaser files tax returns within 30 days each of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's their respective federal income tax return for the tax calendar year in which the Purchaser makes the electiondate of this Agreement falls. Purchaser must also file and the Principal acknowledge that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete. Purchaser and the Principal further acknowledge that the Company has directed them to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which they are organized or resident, and the tax consequences of Purchaser's dissolution. Purchaser and the Principal agree that the Principal has, in consultation with the Purchaser, executed and delivered to the Company with this executed Agreement a copy of the election form Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the "ACKNOWLEDGMENT"), attached hereto as EXHIBIT B. Purchaser and the Principal further agree that the Principal will execute and submit with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION Acknowledgment a copy of the 83(b)) Election, EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALEattached hereto as EXHIBIT C, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERif the Principal has indicated in the Acknowledgment its decision to make such an election.

Election. The Purchaser understands that Section 83 ---------------------- ----------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section ---------------------- 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S ' S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF 1F THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Seller and Buyer shall jointly make all available elections described in Code of 1986, as amended ss. 338(h)(10) and any corresponding elections under applicable state and local tax laws (the "CodeElections") for the Company and its Subsidiaries. Seller and Buyer agree to report the transactions under this Agreement consistently with the Elections. Buyer will prepare all forms required to be filed in connection with the Elections ("Code ss. 338 Forms"), taxes as ordinary income the difference between the amount paid and Buyer and Seller shall each execute an Internal Revenue Service Form 8023 for the Stock Company and each of its Subsidiaries at Closing. All Code ss. 338 Forms shall be filed by the fair market value party required to file such forms under applicable law. Each party shall promptly execute and deliver to the other party all documentation reasonably requested by such other party, including the completed Code ss. 338 Forms. Within 150 days after the Closing, Buyer will compute the Modified Aggregate Deemed Sale Price ("MADSP") of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right assets of the Company to buy back the stock and its Subsidiaries (pursuant to applicable Treasury Regulations) and will notify Seller of its allocation of the Purchase OptionMADSP among the assets. After receipt of Buyer's calculation of the MADSP, Seller shall have 30 days to review such calculation. Unless Seller delivers written notice to Buyer on or prior to the thirtieth day after receipt of the MADSP calculation specifying in reasonable detail its objection to the MADSP calculation, such calculation shall be deemed final and binding between Buyer and Seller. In the event Seller has provided a timely notice of objections to the Company has registered under MADSP calculation with which Buyer does not agree, the Exchange Act, "restriction" Neutral Auditor shall resolve such dispute in accordance with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are provisions of Section 1.4(c) subject to suit under Section 16(b) 4.11(f). Buyer and Seller each agrees to act in accordance with these allocations in any relevant Tax Returns. Notwithstanding anything to the contrary contained in this Section 4.3, all income Taxes imposed as a result of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and transactions contemplated by this Agreement, including as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) result of the Code with Elections, shall be the I.R.S. Even if the fair market value responsibility of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERSeller.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended RACH and Buyer shall (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(bSeller shall cause RACH to) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing join in timely making an election under Section 83(b338(h)(10) of the Code (and any comparable election under state or local Tax law) (collectively, a "Section 338(h)(10) Election") with respect to the RAG West Acquisition, and shall cooperate in the completion and timely filing of such elections in accordance with the I.R.S. Even if provisions of Treasury Regulation Section 1.338(h)(10)-1 (or any comparable provisions of state or local Tax law) or any successor provision. For the fair market value purpose of making the Section 338(h)(10) Election, on or prior to the Closing Date, Buyer and RACH each shall execute five copies of Internal Revenue Service Form 8023 (or successor form) for each Section 338(h)(10) Election with respect to RAG West and RAG Wyoming. Within ninety (90) days after the Closing Date, Buyer shall prepare and deliver to Seller for its review and consent drafts of IRS Forms 8883 and details regarding the allocation of the Stock equals Purchase Price and the amount paid for Liabilities of RAG West and RAG Wyoming (plus other relevant items) among the Stockassets of RAG West and RAG Wyoming in a manner consistent with Sections 338 and 1060 of the Code and the Treasury Regulations thereunder (together, the election must be made to avoid adverse tax consequences "Section 338 Allocation"); provided that in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between no case shall the purchase price and attributable to the fair market value purchase of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form RAG West Shares be inconsistent with the I.R.S. Center RAG West Purchase Price described in which Purchaser files tax returns Section 2.2 unless otherwise required by Law. Seller and Buyer shall negotiate in good faith to resolve any disputed items within 30 sixty (60) days of receipt by Seller. If Seller and Buyer are unable to agree on the Section 338 Allocation within such sixty (60) days, Seller and Buyer shall request the Neutral Auditor in New York City, New York to decide the allocation of any disputed items. Seller and Buyer shall equally share the fees and expenses of such Neutral Auditor. Neither Seller nor Buyer (nor any of their respective Affiliates) shall take any position on any Tax Return or with any Taxing Authority that is inconsistent with such allocation (unless, and then only to the extent, otherwise required by applicable law and provided that a prior written notice is provided to the other Party at least 10 days prior to the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file such an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(binconsistent position is so taken), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands initial Section 338 Tax Adjustment shall be calculated assuming that Section 83 ---------------------- (i) the Buyer will pay the Sellers contingent Earnout Amounts of One Million Dollars ($1,000,000) on each of the Internal Revenue Code one (1) year anniversary and two (2) year anniversary of 1986the Closing Date, as amended and (ii) fifty percent (50%) of the "Code"), taxes as ordinary income Escrow Amount will be disbursed to the difference between Sellers on each of the twelve (12) month anniversary and eighteen (18) month anniversary of the Closing Date. The Seller Representative shall provide the Buyer with a schedule which sets forth the computation of the amount paid for of the Stock Section 338 Tax Adjustment after the Buyer and the fair market value Seller Representative have agreed to the allocation of the Stock as of the date any restrictions on the Stock lapseClosing Purchase Price and contingent Earnout Amount. In this contextmaking such computations, "restriction" means (i) the right highest federal, state and local Tax rate to which any Seller is subject shall be used and any other items of income, deduction, gain, loss or credits of Sellers shall be ignored; (ii) net present value shall be calculated using an eight percent (8%) discount rate, compounded annually; and (iii) any capital loss generated by the Company transaction which is not used to buy back offset capital gain in the stock pursuant to year the Purchase Optioncapital loss is generated shall be disregarded. In the event an audit by the IRS or a state taxing authority changes the Section 338 Tax Adjustment, any additional amount due to a Seller shall be paid by the Buyer to such Seller within ten (10) days of notice to the Buyer of the adjustment. If the Buyer objects to the calculation of the Section 338 Tax Adjustment and the Seller Representative and the Buyer are unable to resolve the differences, the dispute shall be resolved by the Independent Accounting Firm. Any built-in gains tax for which the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit is liable under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) 1374 of the Code with and any similar state income Tax imposed on the I.R.S. Even if Company caused by the fair market value Section 338(h)(10) Election (“Section 338 Taxes”) shall be the responsibility of the Stock equals Buyer and shall not be reflected on the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the futureClosing Financial Statements. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands parties agree that if Purchaser desires to make a Section 83 election338(h)(10) Election is made, Purchaser must file a properly completed all assets other than goodwill shall be sold in exchange for cash, and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERany remaining consideration shall be applied to goodwill.

Election. The Purchaser understands that Under Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount purchase price paid for the shares of Restricted Stock and the their fair market value of the Stock as of on the date any forfeiture restrictions on the Stock lapseapplicable to such shares lapse will be reportable as ordinary income at that time. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he You may elect to be taxed at the time the Stock is purchased shares are acquired rather than when and as the Purchase Option or 6-month Section 16(b) period expires such shares cease to be subject to such forfeiture restrictions by filing an election under Section 83(b) of the Code with the I.R.S. Even if Internal Revenue Service within thirty (30) days after the Grant Date. You will have to make a tax payment to the extent the purchase price is less than the fair market value of the Stock equals shares on the amount paid for the Stock, the election must Grant Date. No tax payment will have to be made to avoid adverse tax consequences in the futureextent the purchase price is at least equal to the fair market value of the shares on the Grant Date. The form for making this election is attached heretoattached. The Purchaser understands that failure Failure to make this filing timely within the thirty (30) day period will result in the recognition of ordinary income by you (in the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and event the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of shares increases after the date of purchase) as the forfeiture restrictions lapse. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES YOU ACKNOWLEDGE THAT IT IS THE PURCHASER'S YOUR SOLE RESPONSIBILITY RESPONSIBILITY, AND NOT THE COMPANY'S ’S, TO FILE A TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S YOUR BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE SALEDECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION. This Restricted Stock Agreement has been duly executed and delivered by all parties hereto, as of the above written Grant Date. ACCEPTED AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.AGREED TO: CARRAMERICA REALTY CORPORATION [NAME]

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock a) Buyer and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he Parent may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an make a joint election under Section 83(b338(h)(10) of the Code and comparable provisions of state law with respect to the Company, Abacus, or both (a “Section 338(h)(10) Election”) and if elected will timely file with the I.R.S. Even if proper authorities executed copies of Internal Revenue Service Forms 8023 and 8883, and any similar state forms, with respect to the fair market value Company and Abacus, as applicable. (b) As soon as practicable after the Closing Date, but in no event later than 150 days after the Closing Date, Buyer shall deliver to Parent a written notice setting forth (with reasonable specificity) Buyer’s good faith calculation of the Stock equals aggregate deemed sales price (ADSP) and adjusted grossed up basis (AGUB) within the amount paid for meaning of the StockTreasury Regulations under Section 338 of the Code and the allocation thereof among the assets of the Company and Abacus, as applicable, in accordance with the principles of the applicable Treasury Regulations, including, but not limited to, Treasury Regulation Sections 1.338-6 and 1.338-7 (the “Buyer’s Allocation”). Within thirty (30) days after receipt thereof, Parent shall deliver to Buyer written notice indicating whether Parent disagrees with the Buyer’s Allocation. If Parent agrees with the Buyer’s Allocation, or if Parent fails to deliver such written notice within thirty (30) days the Buyer’s Allocation shall constitute the agreed-upon Allocation (the “Agreed Allocation”). If Parent provides timely written notice to Buyer of any disagreement with the Buyer’s Allocation, the election must be made parties shall negotiate in good faith to avoid adverse tax consequences determine the Agreed Allocation. If they do not reach agreement within thirty (30) days after commencing negotiations, the parties shall promptly submit the items in dispute to a mutually agreed-upon nationally-recognized accounting firm (or if they cannot mutually agree on such firm, each party shall select a nationally-recognized accounting firm which two firms shall agree on a third nationally-recognized accounting firm) (the future“Accounting Arbitrator”) to resolve the dispute. The form for making this election Accounting Arbitrator shall determine the Agreed Allocation in accordance with the Treasury Regulations, and deliver to Buyer and Parent the Agreed Allocation as soon as possible, but not later than the thirtieth day after the Accounting Arbitrator is attached heretoinstructed to resolve the dispute. The Purchaser understands that failure Any expenses relating to make this filing timely will result in the recognition engagement of ordinary income the Accounting Arbitrator shall be shared equally by the Purchaser, as the Purchase Option lapses, or after the lapse parties. (c) Each of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires parties shall file or cause to make a Section 83 election, Purchaser must file a properly completed and executed election form be filed all relevant Tax Returns consistent with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center Agreed Allocation and shall not take any position inconsistent with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERAgreed Allocation.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 1010 % shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section 83 ---------------------- (a) If Equity One desires to purchase all, or a portion of, of the Internal Revenue Code of 1986First Offered DR Shares, as amended Equity One shall communicate in writing its election to purchase the First Offered DR Shares to LIH within fourteen (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock and the fair market value of the Stock as 14) Business Days of the date any restrictions the DRS Sale Offer was made (the “Equity One Offer Period”). Such communication shall, when taken in conjunction with the DRS Sale Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale and purchase of such First Offered DR Shares to Equity One on the Stock lapseterms and conditions contained in the DRS Sale Offer. In this contextThe failure of Equity One to provide written notice of acceptance within the Equity One Offer Period shall be deemed a rejection by Equity One of the DRS Sale Offer. (b) Election by the Gazit Group. If Equity One does not communicate in writing its election to purchase all of the First Offered DR Shares within the Equity One Offer Period, "restriction" means LIH shall provide the Gazit Group with written notice to that effect within five (5) Business Days after the expiration of the Equity One Offer Period (the “Notice of Availability”) and the Gazit Group shall have the right to purchase all or a portion of such First Offered DR Shares not purchased by Equity One (the “Gazit DRS ROFO”). If the Gazit Group desires to purchase all or a portion of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is First Offered DR Shares not purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if the fair market value of the Stock equals the amount paid for the StockEquity One, the Gazit Group shall communicate in writing its election must to purchase to LIH, which communication shall be made given to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(bLIH within fourteen (14) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days Business Days of the date of purchasedelivery to the Gazit Group of the Notice of Availability (the “Gazit Offer Period”). FurthermoreSuch communication shall, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center when taken in conjunction with the Purchaser's tax return DRS Sale Offer and the Notice of Availability, be deemed to constitute a valid, legally binding and enforceable agreement for the tax year sale and purchase of such First Offered DR Shares on the terms and conditions contained in which the Purchaser makes the electionDRS Sale Offer. Purchaser must also file a copy The failure of the election form with Gazit Group to provide written notice of acceptance within the CompanyGazit Offer Period shall be deemed a rejection by the Gazit Group of the DRS Sale Offer. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b)(c) Sales of the First Offered DR Shares to be sold to Equity One or the Gazit Group, EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALFas the case may be, pursuant to this Section 3.2 shall be made at the offices of Equity One as soon as reasonably practicable following the date the DRS Sale Offer was made but in any event within ten (10) Business Days after the end of the Equity One Offer Period, in the case of a sale to Equity One, or within ten (10) Business Days after the end of the Gazit Offer Period, in the case of a sale to Gazit Group, or such other place and date mutually agreed upon by the parties to the sale. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALESuch sales shall be effected by such member or members of Liberty Group’s delivery to Equity One or the Gazit Group, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERas the case may be, of a certificate or certificates or other instrument evidencing the First Offered DR Shares to be purchased, free of encumbrances, duly endorsed for transfer to Equity One or the Gazit Group, as the case may be, against payment in cash to such member or members of Liberty Group of the DRS Purchase Price times the number of First Offered DR Shares purchased by Equity One or the Gazit Group, as the case may be.

Election. (iii) The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, “aggregate deemed sales price” (as amended defined in Treas. Reg. §1.338-4) (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock “ADSP”) and the fair market value “adjusted gross-up basis” (as defined in Treas. Reg. §1.338-5) (the “AGUB”) shall be allocated among the assets of each Company in accordance with the Stock as of the date any restrictions principles set forth on the Stock lapseSchedule 5.2(e). In this context, "restriction" means the right of the Company to buy back the stock pursuant Buyer shall deliver to the Purchase Option. In Shareholders a proposed allocation schedule (“Proposed Allocation Schedule”) consistent with the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period principles described in Schedule 5.2(e) no later than one hundred twenty (120) days after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange ActClosing. The Purchaser understands Shareholders shall have thirty (30) days to review and respond to the Proposed Allocation Schedule. If the Shareholders determine that he the Proposed Allocation Schedule has not been prepared in accordance with the principles described in Schedule 5.2(e) or otherwise object to the Proposed Allocation Schedule, then the Shareholders shall inform Buyer on or before the last day of such thirty (30) day period by delivering written notice to Buyer (the “Allocation Schedule Objection”). If no Allocation Schedule Objection is delivered to Buyer within such thirty (30) day period, then the Shareholders shall be deemed to have accepted the Proposed Allocation Schedule. If an Allocation Schedule Objection is delivered to Buyer, then Buyer shall have fifteen (15) days to review and respond to the Allocation Schedule Objection by delivering written notice to the Shareholders specifying the scope of its disagreement with the information contained in it. If no such written notice is delivered to the Shareholders within such fifteen (15) day period, then Buyer shall be deemed to have accepted the Allocation Schedule Objection. If Buyer delivers a written notice to the Shareholders in response to an Allocation Schedule Objection, then Buyer and the Shareholders shall promptly meet (in Person, by telephone or otherwise) and attempt in good faith to resolve any dispute or disagreement relating to the Proposed Allocation Schedule (the “Allocation Schedule Dispute”). If Buyer and the Shareholders are unable to resolve the Allocation Schedule Dispute within thirty (30) days following the delivery of an Allocation Schedule Objection to Buyer, then, at any time thereafter, Buyer or the Shareholders may elect to have the Allocation Schedule Dispute resolved by the CPA Firm, with the fees for such CPA Firm to be taxed at apportioned equitably by the time CPA Firm in inverse proportion to the Stock amount in dispute for which each of them is purchased rather than when successful. The allocation schedule, as agreed to by Buyer and the Shareholders or as revised by the Purchase Option or 6-month CPA Firm, shall be the final allocation schedule (the “Final Allocation Schedule”). The Parties agree not to take any position inconsistent with the Final Allocation Schedule for Tax reporting purposes unless otherwise required by a “determination” within the meaning of Section 16(b) period expires by filing an election under Section 83(b) 1313 of the Code with (or similar state law) to the I.R.S. Even if the fair market value of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERcontrary.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock Company and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" each Seller will join with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing Buyer in making an election under Section 83(b338(h)(10) of the Code (and any corresponding election under state, local and foreign Tax law) with respect to the I.R.S. Even if the fair market value purchase and sale of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the futureShares hereunder (a "Section 338(h)(10) Election"). The form Company, each Seller and Buyer shall be jointly responsible for making this election is attached hereto. The Purchaser understands that failure to make this preparing and timely filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires any forms used to make a Section 83 election338(h)(10) Election, Purchaser must file including the joint preparation and filing of IRS Form 8023 and related schedules. Such forms shall be filed timely following the Closing Date. Sellers shall sign, and shall cause the Company to sign, prior to or at the Closing, all federal and state forms used to make a properly completed Section 338(h)(10) Election requiring their signatures, which forms shall be held in escrow by Wilmer Cutler Pickering Hale and executed election form Dorr LLP and thereafter filed by Buyex xxx Xxxxxxx xx xxxxxxxxx xn the xxxceding sentence. Sellers will provide, and will cause the Company to provide, Buyer with any information regarding the I.R.S. Center in which Purchaser files tax returns within 30 days Company as is necessary for Buyer to complete IRS Form 8883 and any supplements thereto. As soon as reasonably practicable after the Closing Date, Buyer will provide Sellers with an allocation of the date Purchase Price among the assets of purchasethe Company as determined by a third-party appraisal firm mutually acceptable to Buyer and Sellers (the "Section 1060 Allocation"), and Sellers shall have a reasonable opportunity to review and comment on the Section 1060 Allocation. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with Buyer shall complete Form 8883 taking into account the Purchaser's tax return for the tax year in which the Purchaser makes the electionSection 1060 Allocation. Purchaser must also file Buyer will provide a copy of the election form completed Form 8883 to the Company and Sellers. Buyer shall be responsible for filing the Form 8023. Each of the Company, Sellers and Buyer shall be responsible for filing the Form 8883 with the appropriate Tax Returns. None of the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(BSellers or Buyer will take any position (whether in audits, Tax Returns or otherwise) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERthat is inconsistent with the Section 1060 Allocation unless required to do so by applicable law.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 1986(a) Buyer, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock Parent and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands that he may elect to be taxed at the time the Stock is purchased rather than when and as the Purchase Option or 6-month Section 16(b) period expires by filing Seller shall join in timely making an election under Section 83(b338(h)(10) of the Code (the "Federal Election"), and, where eligible to do so, any comparable election under foreign, state or local Tax Law (the "Non-Federal Elections"), with respect to the Company and its Subsidiaries listed on Schedule 4.11(r) (collectively, the "Elections"), and shall cooperate in the completion and timely filing of any Tax forms or other documents required for such elections in accordance with the I.R.S. Even if the fair market value provisions of Section 1.338(h)(10)-1 of the Stock equals Treasury regulations (or any comparable provisions of foreign, state or local Tax Law). Buyer and Seller agree that the amount paid Purchase Price and the liabilities of the Company and its Subsidiaries listed on Section 4.11(r) of the Disclosure Schedule (plus other relevant items) will be allocated to the assets of the Company and its Subsidiaries listed on Section 4.11(r) of the Disclosure Schedule for all applicable Tax purposes in a manner consistent with Section 338(h)(10) of the StockCode and the Treasury regulations thereunder. Within sixty (60) calendar days after the Closing Date, Buyer shall provide Seller with a proposed schedule (the "Allocation Schedule") allocating all such amounts as provided herein. The Allocation Schedule shall become final and binding on the Parties hereto (including the Company and its Subsidiaries) sixty (60) calendar days after Buyer provides such schedule to Seller, unless Seller objects in writing to Buyer, specifying the basis for its objection and preparing an alternative allocation. If Seller does object, Buyer and Seller shall in good faith attempt to resolve the dispute within sixty (60) calendar days of written notice to Buyer of Seller's objection. Any such resolution shall be final and binding on the Parties hereto (including the Company and its Subsidiaries). Any unresolved disputes shall be promptly submitted to the Reviewing Accountants for determination, which determination shall be made within thirty (30) calendar days of such submission. The determination of the Reviewing Accountants shall be final and binding on the Parties hereto (including the Company and its Subsidiaries). Buyer and Seller will each pay one-half of the fees and expenses of the Reviewing Accountants. Buyer and Seller shall cooperate with each other and the Reviewing Accountants in connection with the matters contemplated by this Section 7.1, including by furnishing such information and access to books, records, personnel and properties as may be reasonably requested. Each of the Parties hereto (including the Company and its Subsidiaries) agrees to (a) prepare and timely file all applicable Tax Returns, including Form 8023 and Form 8883 (and all supplements thereto) in a manner consistent with the Allocation Schedule as finalized and (b) act in accordance with the Allocation Schedule for all applicable Tax purposes, unless otherwise required by Law. The Parties shall revise the Allocation Schedule to the extent necessary to reflect any adjustments to the Purchase Price as a result of payments made after the Closing Date. In the case of any such payment, Buyer shall propose a revised Allocation Schedule, and the Parties hereto shall follow the procedures outlined above with respect to review, dispute and resolution in respect of such revision. For purposes of this Agreement, the election must "Reviewing Accountants" shall be made Ernst & Young LLP or, if such accounting firm is unwilling or unable to avoid adverse tax consequences serve in such capacity, then an internationally-recognized independent accounting firm to be jointly selected and retained by Seller and Buyer; provided that, if Seller and Buyer are unable to agree on the future. The form for making this election is attached hereto. The Purchaser understands that failure accounting firm to make this filing timely will result in the recognition of ordinary income by the Purchaser, act as the Purchase Option lapsesReviewing Accountants, then each of Seller and Buyer shall cause their respective outside accounting or after auditing firm to consult with each other and jointly recommend an internationally-recognized independent accounting firm to act as the lapse of Reviewing Accountants, and Buyer and Seller shall jointly retain such recommended accounting firm to serve as the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERReviewing Accountants.

Election. The Purchaser understands that Section 83 of ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount paid for the Stock Shares and the fair market value of the Stock Shares as of the date any restrictions on the Stock Shares lapse. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange ActOption and/or, "restriction" with respect to officers, directors and 10% shareholders stockholders, "restriction" also means the 6six-month period after the Closing date hereof during which such officers, directors and 10% shareholders stockholders are subject to suit under Section 16(b) of the Securities Exchange ActAct of 1934, as amended. The Purchaser understands that he Purchaser may elect to be taxed at the time the Stock is Shares are purchased rather than when and as the Purchase Option or 6six-month Section 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. Even if Internal Revenue Code, within 30 days from the fair market value date of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the futurepurchase. The form for making this election is attached as Exhibit A-3 hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the PurchaserHOWEVER, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the CompanyTHE CHANGES IN THE TAX RATES IMPLEMENTED BY THE TAX REFORM ACT OF 1986 NECESSITATE REVIEW OF PURCHASER'S SPECIFIC SITUATION TO DETERMINE HOW THE PURCHASER'S ULTIMATE TAX LIABILITY MIGHT BE AFFECTED AS A RESULT OF FILING AN ELECTION UNDER SECTION 83(b). THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE XXXX THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser understands that Section 83 ---------------------- of the Internal Revenue Code of 198642 49 No later than December 31, as amended 1997, Buyer shall prepare and deliver to Seller a schedule (the "CodePrice Allocation Schedule"), taxes ) allocating the modified ADSP (as ordinary income such term is defined in Treasury Regulations Section 1.338(h)(10)-1) among the difference between the amount paid for the Stock and the fair market value of the Stock as of the date any restrictions on the Stock lapse. In this context, "restriction" means the right assets of the Company to buy back and the stock pursuant Subsidiaries in accordance with the Treasury regulations promulgated under Section 338(h)(10). Any objections by Seller to the Purchase OptionPrice Allocation Schedule prepared by Buyer shall be raised within 60 business days after the receipt by Buyer of the Price Allocation Schedule. If Buyer and Seller are unable to resolve any differences within 60 business days thereafter, such dispute shall be resolved by the Accounting Referee, and, if necessary, a revised Price Allocation Schedule consistent with the determination made by the Accounting Referee shall be prepared by Buyer as soon as possible thereafter. In all events, the event Price Allocation Schedule shall be finally prepared and agreed upon prior to August 15, 1998. Buyer and Seller shall each pay one-half of the costs, fees and expenses of the Accounting Referee. The Price Allocation Schedule shall be binding on the parties hereto, and Seller and Buyer agree to act in accordance with such Schedule in the preparation, filing and audit of any Tax return. Buyer agrees to pay Seller for the "Section 338 Cost". The Section 338 Cost shall be equal to fifty percent of the excess, if any, of (a) the Tax payable by Seller taking into account the Section 338(h)(10) Election and the deemed liquidation of the Company has registered under and its Subsidiaries and giving effect to the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means price allocation contained in the 6-month period after Price Allocation Schedule (including any Tax payable as a consequence of the triggering of the policyholder surplus account upon the deemed liquidation) over (b) the amount of Tax that would have been payable if the Seller had reported the sale of the Shares for the Purchase Price hereunder on the Closing during which Date, such officersTax being computed in each case using the maximum applicable statutory rate, directors and 10% shareholders are subject provided, however, that the Section 338 Cost shall in no event exceed $3,500,000. Seller agrees to suit under pay Buyer for the "Section 16(b) 338 Benefit". The Section 338 Benefit shall be equal to fifty percent of the Exchange Act. The Purchaser understands excess, if any, of (a) the amount of Tax that he may elect to be taxed at would have been payable if the time Seller had reported the Stock is purchased rather than when and as sale of the Shares for the Purchase Option or 6-month Price hereunder on the Closing Date, such Tax being computed in each case using the maximum applicable statutory rate, over (b) the Tax payable by Seller taking into account the Section 16(b338(h)(10) period expires by filing an election under Section 83(b) Election and the deemed liquidation of the Code with Company and its Subsidiaries and giving effect to the I.R.S. Even if price allocation contained in the fair market value Price Allocation Schedule (including any Tax payable as a consequence of the Stock equals the amount paid for the Stock, the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached hereto. The Purchaser understands that failure to make this filing timely will result in the recognition of ordinary income by the Purchaser, as the Purchase Option lapses, or after the lapse triggering of the 6-month policyholder surplus account upon the deemed liquidation) provided, however, that the Section 16(b) period, on the difference between the purchase price and the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center 338 Benefit shall in which Purchaser files tax returns within 30 days of the date of purchase. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERno event exceed $3,500,000.

Election. The Purchaser understands Mr. Xxxxxxxx xnderstands that under Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "“Code"”), taxes as ordinary income the difference between the amount Purchase Price paid for the Stock Purchased Shares and the their fair market value of the Stock as of on the date any forfeiture restrictions on applicable to such shares lapse will be reportable as ordinary income at that time. For this purpose, the Stock lapse. In this context, "restriction" means term “forfeiture restrictions” includes the right of the Company Corporation to buy back repurchase the stock Purchased Shares pursuant to the Purchase Optionits Repurchase Right under this Amendment. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser understands Mr. Xxxxxxxx xnderstands that he may elect to be taxed at the time the Stock is purchased Purchased Shares are acquired hereunder to the extent the fair market value of the Purchased Shares exceeds the Purchase Price rather than when and as the Purchase Option or 6-month Section 16(b) period expires such Purchased Shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the I.R.S. Even if within thirty (30) days after the date of purchase hereunder. If the fair market value of the Stock Purchased Shares at the date of purchase equals (or is less than) the amount Purchase Price paid for the Stock(and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit C hereto. The Purchaser understands Mr. Xxxxxxxx xnderstands that failure to make this filing timely within the thirty (30) day period will result in the recognition of ordinary income by Mr. Xxxxxxxx (in the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and event the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of Purchased Shares increases after the date of purchase) as the forfeiture restrictions lapse. FurthermoreMR. XXXXXXXX XS URGED TO SEEK ADVICE FROM HIS TAX ADVISOR AS TO WHETHER OR NOT TO MAKE A SECTION 83(b) ELECTION AND THE RAMIFICATIONS OF MAKING SUCH AN ELECTION. IN PROVIDING THE FORM ATTACHED AS EXHIBIT A, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the electionTHE COMPANY MAKES NO REPRESENTATIONS AS TO WHETHER THE SECTION 83(b) ELECTION SHOULD BE MADE BY EMPLOYEE. Purchaser must also file a copy of the election form with the CompanyMR. THE PURCHASER ACKNOWLEDGES XXXXXXXX XCKNOWLEDGES THAT IT IS THE PURCHASER'S HIS SOLE RESPONSIBILITY RESPONSIBILITY, AND NOT THE COMPANY'S CORPORATION’S, TO FILE A TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER HE REQUESTS THE COMPANY CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S HIS BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION IS A CONDITION TO THE SALE, AND THAT THE COMPANY SHALL NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNER.

Election. The Purchaser Employee understands that under Section 83 ---------------------- of the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary income the difference between the amount Purchase Price, if any, paid for the Stock Restricted Shares and the their fair market value of the Stock as of on the date any forfeiture restrictions on the Stock lapseapplicable to such Restricted Shares lapse will be reportable as ordinary income at that time. In this context, "restriction" means the right of the Company to buy back the stock pursuant to the Purchase Option. In the event the Company has registered under the Exchange Act, "restriction" with respect to officers, directors and 10% shareholders also means the 6-month period after the Closing during which such officers, directors and 10% shareholders are subject to suit under Section 16(b) of the Exchange Act. The Purchaser Employee understands that he Employee may elect to be taxed at the time the Stock is purchased Restricted Shares are acquired hereunder to the extent the fair market value of the Restricted Shares differs from the Purchase Price, if any, rather than when and as the Purchase Option or 6-month Section 16(b) period expires such Restricted Shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the I.R.S. Even if within thirty (30) days after the Date of Grant. If the fair market value of the Stock Restricted Shares at the Date of Grant equals the amount Purchase Price paid for the Stock(and thus no tax is payable), the election must be made to avoid adverse tax consequences in the future. The form for making this election is attached as Exhibit B hereto. The Purchaser Employee understands that failure to make this filing timely within the 30-day period will result in the recognition of ordinary income by Employee (in the Purchaser, as the Purchase Option lapses, or after the lapse of the 6-month Section 16(b) period, on the difference between the purchase price and event the fair market value of the Stock at the time such restrictions lapse. Purchaser understands that if Purchaser desires to make a Section 83 election, Purchaser must file a properly completed and executed election form with the I.R.S. Center in which Purchaser files tax returns within 30 days of Restricted Shares increases after the date of purchase) as the forfeiture restrictions lapse. Furthermore, Purchaser acknowledges that Purchaser must file an election form with such I.R.S. Center with the Purchaser's tax return for the tax year in which the Purchaser makes the election. Purchaser must also file a copy of the election form with the Company. THE PURCHASER EMPLOYEE ACKNOWLEDGES THAT IT IS THE PURCHASEREMPLOYEE'S SOLE RESPONSIBILITY RESPONSIBILITY, AND NOT THE COMPANY'S 'S, TO FILE A TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER EMPLOYEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASEREMPLOYEE'S BEHALF. THE PURCHASER ACKNOWLEDGES THAT THE TIMELY FILING OF THE 83(B) ELECTION EMPLOYEE IS A CONDITION RELYING SOLELY ON EMPLOYEE'S ADVISORS WITH RESPECT TO THE SALE, AND THAT THE COMPANY SHALL DECISION AS TO WHETHER OR NOT BE REQUIRED TO ISSUE A CERTIFICATE REPRESENTING THE STOCK UNTIL IT IS SATISFIED THAT SUCH ELECTION HAS BEEN FILED IN A TIMELY MANNERFILE AN 83(b) ELECTION.